DeLong Questions Fair Use Doctrine on HillTestifies before House Energy and Commerce Subcommittee

WASHINGTON D.C. - Fair use has outlived much of its usefulness in a market with ever-increasing digital offerings for sale at varying price points, Progress & Freedom Foundation Senior Fellow James DeLong told a congressional subcommittee today. In testimony before the House Energy and Commerce Subcommittee on Commerce, Trade and Consumer Protection on "Fair Use: Its Effects on Consumers and Industry," DeLong proposed a limited approach to fair use. "[I]t makes the most sense to examine fair use as a set of doctrines developed to make a market system for creative works function better by putting some oil in the joints when necessary, when there are good reasons for thinking that the system will break down."

Much of the problem in the debate over fair use stems from the fact that many view the Copyright Clause as intended to promote the interests of consumers, not creators, said DeLong, director of PFF's Center for the Study of Digital Property. "There is also great emphasis on a 'balance' between consumers and creators, as if we were in some zero-sum game in which the two quarrel over a limited pie," he told the subcommittee headed by Rep. Cliff Stearns (R-Fla.). "Creators want to create, and they are desperately anxious to find markets for their works. Consumers want access to the works. The fundamental need is not for a 'balance,' whatever that might be, but for a working market system."

"A crucial point is that fair use and free use are not the same thing," DeLong explained. "Consumers' interest is in having creative works readily available, in the same sense that consumers have a strong interest in having a good supply of decent food available in the supermarket. In neither case does this mean that the cost should be zero. Indeed," he said, "to the extent that payment systems would encourage the development of new delivery techniques, consumers are much better off to be able to pay than to hold out for free on the basis of some abstract concept of 'fair.'"

Fair use advocates often cite changes wrought by the Internet as reasons to reduce property protection in the name of fair use, but DeLong argued that these individuals "defending the old doctrines are actually the ones who are mired in old models, fearful of change, and, to be blunt, trying to cling to obsolete privileges that might have been appropriate under old technologies, but not under the new." New business models, with varying access and use offered at different price points, are the result of market forces remaking the content landscape.

"In sum, fair use is a doctrine that has outlived much of its usefulness," DeLong told the Subcommittee. "Properly understood, much of it is based on problems of high transaction costs at a time when the Internet is wringing transaction costs out of the system. Fair use still has a role in those areas where creators have positive incentives not to disseminate. It has a role where markets have not yet been constructed, as in the orphan works situation. But for the most part, it should be left to atrophy as the magic of technology makes new forms of content available."